You are able to print out numerous reports to provide your accountant with the necessary information to maintain your payroll and tax records.

Payroll Overview The Payroll module supplies you with all the tools to do your complete payroll processing and maintain detailed employee files for your payroll and HR departments. You are able to print out numerous reports to provide your accountant with the necessary information to maintain your payroll and tax records. You can break out your information by pay period, month or period, quarter, and year. The program will split employee expenses by departments if you assign more than one department in your Payroll Setup. All the necessary payroll information is automatically updated in G/L and Checkbook. Accounting for Windows Payroll 581

Workflow The following figure describes the payroll workflow. Department Setup Payroll Setup Enter/Edit Employees Enter/Edit Timecard Generate Payroll Add/Edit Payroll Backup Data Post Payroll Payroll Reports Update G/L & Checkbook G/L Reports The first step in setting the payroll system is to set up the Departments. This step is required only if you will be doing a multi department payroll. The next step is to select the Payroll Setup option and set up the employee deductions, accrual setup etc. After your departments are set up, you can use the Employee Maintenance option to enter the employees. At this point you are ready to issue checks to your employees. There are two ways to do this: Auto Process Payroll Checks: For details on the AutoPay option, please refer to page 623. Manually Process Payroll Checks: Manual processing is explained in the following section. 582 Payroll Accounting for Windows

After you have set up your employees, use the Enter/Edit Timecard option to enter any additional amounts (New Hours worked for the period / Overtime / Bonus etc.). Use the Timecard List report to verify if the entered times are correct. Select the Generate Payroll option to calculate the payroll for the employees. Use the Edit Payroll Checks option to make any changes, and verify them by printing the Payroll Worksheet. Once you have verified that the information is correct, Print the Checks. Print the Child Support report if required. At this point we recommended that you backup your data by using the Backup option form the File menu. Next, select the Post Payroll option to update the employee records, and post to the General Ledger. After you have posted the payroll, you can run your federal, state, and employee history reports. Each one of these sections above is described in detail in the following sections. Quick Start for Payroll Please refer to the Quick Start Guide chapter for the quick steps to create setup and issue payroll checks. Payroll Setup The first step in using the payroll program is setting up the payroll module. Payroll setup involves the following steps: Payroll Department Maintenance. Bank Maintenance Edit SUI / SDI / CA-ETT Rates. Workers Compensation Rates Payroll Tax Table Version Accounting for Windows Payroll 583

Deductions Earnings Accruals W2/W3 Form Setup Miscellaneous Payroll Department Maintenance In order to use the payroll program, at least one department must be set up before you can add your employees to the payroll system. Department Tracking: For more information on the background of Department tracking as related to the entire system, please refer to the General Ledger chapter. The following pages cover department tracking specifically for the payroll module only. For most situations, you will not have to set up any departments. The program is preset with the default Department Number as 1. You can use Department Number 1 when setting up your employees. You will need to work with the department setup in the following situations only: If you have replaced the default chart of accounts supplied in the program with your own chart of accounts If you have enabled the job tracking feature If you wish to split employee payroll expenses to multiple departments for separate expense or liability tracking. Most of the users do not fall into the categories above and you can use the existing Department Number 1 that is preset by the program. The department setup is required to help in tracking the following information: Posting to update the employee file with the payroll checks Posting to update the General Ledger chart of accounts Posting to update Job Tracking Tracking payroll for multiple departments 584 Payroll Accounting for Windows

The department setup is a one time set up process only. Once your departments are set up, you do not have to worry about it. In addition you do not have to be familiar with the chart of accounts or job tracking features. The payroll program will automatically set up the accounts for you. You need to enter the Job ID only if you have the Job tracking feature enabled in the Job Setup option. Creating a New Department ID Step 1: Step 2: Step 3: Step 4: Select the Department Maintenance option from the Payroll menu. Place the cursor on the Department ID field. Type in the new ID to add in the Department ID field and press Enter. Complete all the fields for the Department. A detailed description of all the fields is on page 586. Click on the Save-F4 button to save the Department. Editing a Department ID Step 1: Step 2: Step 3: Make sure that the cursor is on the Department ID field. Type in the Department ID you wish to Edit. If you do not know the Department ID, click on the Browse-F3 button to list the Department IDs on the screen. Select a Department ID from the browse list. Press Enter on the Department ID field. All the fields for the Department display on the screen. You can change all the editable fields. You cannot change the information in the Department ID field. Click on the Save-F4 button to save the Department. Accounting for Windows Payroll 585

Deleting a Department ID Step 1: Step 2: Step 3: Make sure that the cursor is on the Department ID field. Type in the Department ID you wish to delete. If you do not know the Department ID, click on the Browse-F3 button to list the Department IDs on the screen. Select a Department ID from the browse list. Press Enter on the Department ID field. All the fields for the Department display on the screen. Click on the Delete-F8 button to delete the Department. Set up unlimited payroll departments. Fields for Payroll Department Maintenance Listed below is the explanation of the various fields in the data entry screen. When adding or editing a department, the program will ask you for the following information: Department ID: This is the identification number for the department. When you add employees to the payroll program, you 586 Payroll Accounting for Windows

will be asked for a Department ID. Each employee requires a Department ID. You can use a 10 character Department ID. Department Name: Enter the name of the department. The department name can be 30 characters wide. Job ID: This field will be available only if you have Job Costing enabled in the Company Setup. Enter the Job ID for the Job that will be associated with this department. Default Account Numbers: The payroll program automatically provides the default account numbers for posting to the General Ledger. For most of the users, the default account numbers are adequate. However, if you wish, you can change these account numbers to suit your requirements. All the account numbers are Payroll Liability accounts. The only two exceptions are the payroll expense accounts for the employee and the employer. These accounts are of the type Operation Expenses. Accounting for Windows Payroll 587

How Do I Track Multiple Payroll Departments? For example, take an employee that works for 40 hours a week. Say this employee was an electrician and you wanted to track his payroll expenses by departments. Listed below is his last workweek: 20 Hours were spent working for the Sales Department (Department#1). 10 Hours were spent working for the Administration Department (Department#2). 10 Hours were spent working for the Shipping Department (Department#3). Now as an employer, we want to issue a payroll check to this employee but track the payroll expenses relating to him separately for each department. You can achieve this as follows: Setup the three departments: Department #1 as the Sales Department Department # 2 as the Administration Department Department # 3 as the Shipping Department Each department would have its own expense account. 588 Payroll Accounting for Windows

When you create a new department, the program gives the following account numbers: Employee Payroll Expense: 52340 Employer Payroll Expense: 52350 You should replace these account numbers with a different account number for each department. For example, you can create the following expense accounts for each department as shown below: Department Description Employee Expense Employer Expense Department # 1 Sales Department 52341 52351 Department # 2 Department # 3 Administration Department Shipping Department 52342 52352 52343 52353 When entering the Timecard information for an employee, you will enter the employee s hours as follows: Type Hours Department Regular 20 1 Regular 10 2 Regular 10 3 When you create the payroll checks for this employee, the payroll program will automatically post the correct amounts to the appropriate department. How Do I Process Job Tracking From Payroll? The splitting of expenses to multiple jobs works exactly in the as departments as shown above. The first step is to enable Job tracking in the Job Setup option. The next step is to create a separate Department ID for each Job. For example, you can set up a Department ID #1 for Job ID #1, Department ID #2 for Job ID#2. Accounting for Windows Payroll 589

When you are entering the Timecard information for this employee, you will enter this employee s hours as follows: Type Hours Department Job Regular 20 1 1 Regular 10 2 2 When you create the payroll checks for this employee, the payroll program will automatically post the correct amounts to the appropriate Job in General Ledger. Bank Maintenance The Bank maintenance option is used to set up information for: Your bank/checking account(s). The starting checkbook number. The Bank and the Payer s name/address. If you have installed the MICR module for printing on blank check stock paper, then you can also enter the MICR related information. For further details, refer to the Accounts Payable chapter. Edit SUI/SDI/CA-ETT Rates Use this option to enter the SUI (State Unemployment) and SDI (State Disability) rates for the Employee and the Employer. Each Tax Table item (e.g. CA1, CA2 etc.) has its own rate. 590 Payroll Accounting for Windows

Track SDI, SUI, and CA-ETT contributions. The first step is to select the Tax Table. The next step is to enter the employee rates for SUI and SDI. Next to each rate, enter the Wage Base Limit. The Wage Base Limit is limit at which the program will stop calculating this deduction for the employee. After you have entered the employee rate, you can enter the employer rates. Your employer rates are provided to you by the state. Many states do not have either the Employee or the Employer contribution. Contact your Accountant or your State to determine the applicable rates. Important Note: If you change the employer contribution for one part of the state (or category of employee), the program will prompt you if you want to have the change made for all the related states. Example, if you change the rate for CA1, the program will ask you if you want to make the changes to CA2 and CA3 also. If you reply "Yes" to the prompt, the program will cascade the changes to CA2 and CA3. You can also enter the state experience rate period The experience rate period(s) entered in the above-mentioned screen will be printed on Part II (Tax Due or Refund) Column 3(d) of the Form 940 (Employer's FUTA Tax Return). Accounting for Windows Payroll 591

The following reports/forms, by default, print the state identification number that you entered on this screen. If you leave this field blank, then the state identification number entered by you in the company is used. These reports are: State Unemployment Insurance Report State Disability Insurance Report California State Training Tax Report California DE 7 Annual Reconciliation Report W2 where employees are from multiple states Workers Compensation Rates This option is used to set up and maintain Workers Compensation Rates. By setting up this option, you can have the program automatically calculate your Workers Compensation Insurance premiums for you. You can view this information by running the Workers Compensation Report after generating and posting payroll. Workers Compensation premiums are calculated for each employee by multiplying the number of hours worked by the employee s regular wage. This is then multiplied by the Workers Compensation Rate defined on this screen. Since this rate can vary by different categories of employees, the program allows you set the Workers Compensation Rate for each department. For more information on setting up departments, see page 584. Overtime wages can be calculated at either the regular wage rate or the overtime wage rate. You can select this at the time of printing the Workers Compensation Report. If you decide to set up Workers Compensation codes for only some employees, reports will give you totals only for those employees. 592 Payroll Accounting for Windows

After you select this option, complete the fields as follows: Workers Comp. ID: Enter the ID code you wish to use to designate this category of employee. You can use numbers and letters. The ID code can be up to 10 digits long. Description: Enter the description of this Workers Compensation ID. Depart ID: Enter the payroll department for this Workers Compensation ID. You can click on the Browse button or press the function key F3 to see a list of your departments. For example, if you have employees who perform field service and others who perform office work, you may have different Workers Compensation rates for each of these categories. In this example, you will need to set up two departments, say department 1 and department 2. You will set up a Workers Compensation ID for each of these two departments. Rate: Enter your Workers Compensation insurance premium rate for this category of employee. The number you enter here is a percentage. That is, if you enter 10.00, your rate will be 10.00%. Maximum Amount: If there is a ceiling to your insurance premium, enter that amount here. Accounting for Windows Payroll 593

Notes: You can enter your notes for this Workers Compensation ID. Payroll Tax Table Version When you select this option, the program will display the version number of the currently installed tax table. If your Tax Tables are not current, you may contact the Sales or Technical Support Department to purchase the latest tax tables. Tax Tables for the following year usually ship in the last week of December as we get last minute changes reported by various states. Deductions There are two types of deductions in the payroll program: Regular Deductions: These deductions are subtracted from the employee s paycheck after all the taxes have been calculated. Some examples of deductions are employee insurance contributions, employee loans etc. Tax Deferred Deductions: These deductions are subtracted from the gross wages before taxes are calculated. You can select the taxes that will take these deductions into account before they are calculated. Deduction Amounts as Dollar or Percent: Under each employee you can mark a deduction as a Dollar amount or a Percentage of the Gross. 594 Payroll Accounting for Windows

The deduction setup screen is discussed in the following section: How Do You Set Up a Regular Deduction? In order to setup a regular deduction you must do the following: In the Deduction Name column, type in the name of the deduction. For example, if you wish to setup the Deduct #1 field as a Loan deduction, replace the word Deduct #1 with the word Loans. Make sure that all the other columns in the row called Loans are not checked off (i.e. they are left blank). Now for each employee (in the Employee Maintenance screen), the first deduction will show up as the word Loans. Accounting for Windows Payroll 595

How Do You Set Up a Tax-Deferred Deduction? In order to setup a tax-deferred deduction you must do the following: In the Deduction Name column, type in the name of the deduction. For example, if you wish to setup the Deduct #1 field as a 401K deduction, replace the word Deduct #1 with the word 401K. Make sure that all the other columns in the row called 401K are checked off as per requirements for your plan (e.g., let's say your 401K plan requires that all the taxes be deferred from the 401K deduction. In such a situation, you will place a check mark in all the columns. If you are not sure, contact your Accountant/IRS to determine which taxes are to be deferred). Now for each employee (in the Employee Maintenance screen), the first deduction will show up as the word 401K. Important Note: Before you post any payroll checks, ensure that your deductions are setup correctly. Payroll checks cannot be changed once they are posted. Deferral Type: You can choose if a tax-deferred deduction should print on the W2. The choices are: Section 401(k) Section 403(b) Section 408(k)(6) Section 501(c)(18)(d) Other Plans (Print on W2) Other Plans (Do Not Print on W2) If you are not sure which section your tax-deferred plan fits into, please contact your accountant or the IRS. 596 Payroll Accounting for Windows

Earnings Each employee has earnings marked as: Regular Overtime Personal Vacation Sick In addition to these, you can customize the names of six more earnings. For example, you may wish to rename Misc #1 earning as Bonus. These changes reflect throughout the payroll system. Accruals This option is used to customize the method of calculating Accruals (Vacation, Sick, and Personal leave). The program can calculate these Accruals for you automatically when you create a payroll check. The accrual setup is discussed in the following section: Accounting for Windows Payroll 597

How Does the Accrual System Work? Many companies have a policy that employees accrue (or earn) benefits based on the number of hours worked E.g., let s say a company has a policy that for every 40 hours worked, each employee earns 3 hours of vacation time. In order to set this up, you would enter the following in the Employee Maintenance option for each employee as: Vacation hours earned per hour of regular and overtime wages = 0.075 The number 0.075 is calculating by dividing 3 hours by 40 hours. The same concept can be applied to personal and sick benefits. Under each employee (in Employee Maintenance), you can choose if you wish to have these accruals automatically calculated. In addition, you can choose if the accruals will be calculated on regular, overtime or on both. 598 Payroll Accounting for Windows

How Does the Payroll Program Calculate the Accruals for Salaried and Commissioned Employees? The program calculates the accruals for the salaried and commissioned employees in the same manner as the hourly employees as discussed above. Since employees with a fixed salary do not work on an hourly basis, the program uses a conversion table to convert the wages paid to a salaried employee into hours. These hours are used to accrue benefits. Please note that this conversion is done only to calculate the accrued benefits. The employee s paycheck and other reports will show the salaried wages only. Let us look at an example. The program assumes that a salaried employee who is paid on a weekly basis earns equivalent of 40 hours of regular wages. If your company policy states that a salaried employee earns an equivalent of 45 hours a week, then you would replace: A Week = 40 with A Week = 45 From now on all salaried employees and commissioned employee base wages (regular) are assumed to earn an equivalent of 45 hours a week in the calculation of accrued benefits. If you wish to print Accrual information on the paycheck, you can mark the checkbox called Print Accrual details on the paycheck. This can be accessed from the Payroll Setup / Accruals tab. Accounting for Windows Payroll 599

W2/W3 Form Setup This option is used to setup default information for printing on the W-2 forms. These options are: Include SDI/SUI on W-2 Statement Check this box if you wish to print State Disability or Unemployment deductions on the W-2 statement. Include Tax Deferred Income (Box 13) Check this box if you wish to print Tax Deferred on the W-2 statement. SDI/SUI description: Enter the default description for the SDI/SUI box on the W-2. The default description is SDI. Employer Registration Number: If you are a New Jersey employer, enter your N.J. State Registration number. This will be printed on the W-2 form. W-3 Information: Most of the boxes for the W-3 will be automatically calculated and pre-filled for you. You can enter the information for certain boxes that are not pre-filled. These are: Box 8 (Allocated Tips) Box 10 (Dependent Care Benefits) Contact Person E-Mail Address Telephone# Fax# 600 Payroll Accounting for Windows

Miscellaneous Inform when report has completed printing: If you check this box then after each report is printed, the program will ask you click on OK and inform you that the report has finished printing. Employee Maintenance The Employee Maintenance screen is used to do the following: Adding a new employee Editing an existing employee Deleting an existing employee Creating a New Employee Step 1: Step 2: Step 3: Step 4: Select the Employee Maintenance option from the Payroll menu. Place the cursor on the Employee field. Type in the new Employee ID to add in the Employee field and press Enter. Complete all the fields for the Employee. A detailed description of all the fields is on page 602. Click on the Save-F4 button to save the Employee. Editing an Employee Step 1: Make sure that the cursor is on the Employee field. Type in the Employee ID you wish to Edit. If you do not know the Employee ID, click on the Browse-F3 button to list the Employees on the screen. Select an Employee from the browse list. Press Enter on the Employee ID field. Accounting for Windows Payroll 601

Step 2: Step 3: All the fields for the Employee display on the screen. You can change all the editable fields. To change the Employee ID of an existing employee, select the Change Employee ID submenu option in the Setup menu. Click on the Save-F4 button to save the Employee. Deleting an Employee Step 1: Step 2: Step 3: Make sure that the cursor is on the Employee field. Type in the Employee ID you wish to delete. If you do not know the Employee ID, click on the Browse-F3 button to list the Employees on the screen. Select an Employee from the browse list. Press Enter on the Employee ID field. All the fields for the Employee display on the screen. Click on the Delete-F8 button to delete the Employee. Employee Fields The employee screen has Tabs for Personal Information, Earnings Information, Payroll Withholdings, Payroll Deductions, Benefit Accruals, W-2 Information, Other Details, Checks and Posted QTD Totals. Each Tab is explained below. Important Note: Before you start adding any employees, please read the Payroll section of the Readme file. This file contains the latest changes to the payroll program. There are many state specific issues in the Readme file. You can access the Readme from the Help menu. Once you have entered and saved all the employee information, you can use the Previous and the Next button to scan through the employee file. 602 Payroll Accounting for Windows

Personal The personal information screen is discussed in the following section. Temporarily or permanently disable an employee from payroll. Built-in EIC Support. Employee ID: Enter the employee s identification ID. This is the ID you will use when processing this employee. You can use whatever you want for this field, just as long as no two employees share the same ID. For example, you might use the employee s last name followed by a sequential number; or you might use the employee s social security number or phone number. It really is entirely up to you. The ID can contain both letters and numbers and can be up to 10 characters in length. Last Name: Enter the employee s last name. This field can contain 20 characters. This field cannot be left blank. First Name: Enter the employee s first name. This field can contain 20 characters. This field cannot be left blank. Middle Initial: Enter the employee s middle initial. This field can contain one character. Job Title: Enter the Job Title of the employee. Accounting for Windows Payroll 603

Address: Enter the employee s street address. This field can contain 30 characters. City: Enter the name of the city in which the employee lives. This field can contain 20 characters. State: Enter the two-letter ID for the state in which the employee lives. For example, if the employee lives in California, you would enter CA as the state ID. Zip: Enter the employee s zip code. This field can accommodate a 10-character zip code. Phone #: Enter the employee s phone number. Married: Mark this checkbox if this employee is married. If you mark an employee as married, the program calculates taxes for that employee using the rates for married employees. Department: Enter the ID assigned to the department in which this employee works. You set up the Department ID. It can be up to 10 characters in length and can consist of both letters and numbers. This field cannot be left blank. For example, you might have a Sales department, a Product Development department, and a Shipping department. You could give the Sales department an ID called SA, the Product Development department an ID called PD, and the Shipping department an ID called SH. Or, if you happen to have your salespeople divided into two departments; One that handles incoming requests for a product, and one that follows up on sales leads, you might assign Department IDs of SALES1 and SALES2, respectively. What you assign is entirely up to your own preference. If the department you specify for an employee has not already been entered in your list of departments, you will be given the opportunity to add it without leaving this employee s record. For more information on Department Setup, please refer to page 584. 604 Payroll Accounting for Windows

The program comes pre-assigned with the Department ID 1. If you are not sure, enter 1 in this field. If you select 1, the program will use the default chart of accounts for posting information to the General Ledger program. Social Security Number: Enter the employee s social security number. State Tax Table: Indicate the correct tax table for the state in which the employee is taxed. You can click on the Browse-F3 button to list the State Tax Table Codes. This is a required field and you must enter a Tax Table Code. Status: You can mark as Employee as Inactive when they no longer work for you. If you want to temporarily stop issuing checks to an employee, you can mark them as Temporarily Inactive. Current employees are to be marked as Active. Apply EIC: EIC stands for Earned Income Credit. The federal government issues this credit to employees that earn low wages. In order to qualify for this credit, the employee must meet certain criteria. Check with your accountant or the IRS if you have questions about qualifying for EIC. If an employee does not qualify for EIC you should mark them as None. If an employee qualifies for EIC you should mark them as either: Single or Married with spouse filing certificate Married with both spouses filing certificate Accounting for Windows Payroll 605

Earnings The Payroll Earnings Screen is discussed in the following section: Setup hourly, salaried, or commissioned employees. Supports 15 types of pay. Pay Frequency: The choices for this field are: Daily Weekly Biweekly Semi Monthly Monthly Quarterly Semi-Annual Annual Pay Type: You can select the type of pay the employee receives. The choices are: Hourly Salaried Commissioned Salaried Annual Salary: If this employee is salaried, enter the salary amount he receives per year. For example, if the employee receives $35,000 a year, enter the number 35000.00. 606 Payroll Accounting for Windows

How Are the Salaried Wages Calculated? When you run the Generate Payroll option, the gross earnings for a salaried employee is calculated by dividing the annual salary by the number of pay periods in a year. For example, if you have entered $20800.00 in the Annual Salary field for a weekly employee, the gross salary will be $400.00 (20800 divided by 52 weeks in a year). This amount will be automatically calculated when you select the Generate Payroll option. If you need to issue additional salary (like bonus etc.) you will need to enter it in as a miscellaneous earning. When you select the Generate Payroll option, the program will automatically calculate the regular salary. You can add any additional earnings that to generated paycheck using the Edit Payroll Checks option. Hourly - Rate per Hour: If this employee is paid by the hour, enter the hourly rate. For example, if the employee is paid $15.25 per hour, enter 15.25. Default Hours Per Pay period: Enter the number of hours the employee is expected to work per week if this employee is paid on an hourly basis. How Are the Hourly Wages Calculated? When you complete the Generate Payroll option, the gross earnings for an hourly employee are calculated by multiplying the Hourly Rate times the Default Hours field. This works fine if the hourly employee has fixed number of hours per week (or Pay period). If your employee works different hours each week (or Pay period), then you must use the Enter/Edit Timecard to enter earnings for the employee s regular, overtime and other earnings. Note that when you enter any pay type for an hourly employee the program will ignore the default hours in the employee file. This means that if you enter the hours for overtime, bonus, etc., you must also enter the employee s regular hours. Commission - Annual Salary Base: Enter your employee s annualized commission base if this employee is commissioned. Accounting for Windows Payroll 607

How Are Commission Wages Calculated? If a commissioned employee is paid a base salary plus commission, when you run the Generate Payroll option, the gross earnings (base salary) for the employee are calculated by dividing the Commission - Annual Salary by the number of pay periods in a year. For example, if you have entered $20,800.00 in the Commission - Annual Salary field for a weekly employee, the gross salary will be $400.00 (20800 divided by 52 weeks in a year). This amount will be automatically calculated when you select the Generate Payroll option. To add the commissions for the week (or Pay period) you will need to enter it in as a pay type using the Enter/Edit Timecard option. When you select the Generate Payroll option, the program will automatically calculate the regular commission base salary, and add any additional pay type that you have entered. Default Hours and Rate: There are five fixed pay types in the program. These are: Regular Overtime Personal Vacation Sick In addition to these, you can customize the names of six more earnings. For example you may wish to rename Misc #1 earning as Bonus. These changes reflect throughout the payroll system. You can change the names for the Misc #1 earnings from the Payroll Setup option in the payroll SETUP menu. 608 Payroll Accounting for Windows

Withholdings The payroll-withholding screen is discussed in the following section: Set up withholdings and City taxes. Support Worker s Comp. Codes. Exempt employees from taxes. Federal Exemptions: Enter the number of Federal dependents an employee claims. Employees are required to complete a W-4 form to inform the employer about the exemptions they wish to claim. State Exemptions: Enter the number of State dependents an employee claims. MI State Exemptions: This field is applicable to Michigan taxpayers only and is used for calculating the state withholding tax. Employees electing the "No Form Option" on the Form MI-W4 can claim Special Allowance Exemptions. In This field, enter the number of special exemptions. For example, if an employee qualifies for two special exemptions, enter the number 2 in the field for that employee. Since this field is a state specific field, please refer to the Readme file from the Help menu for any updated information. Accounting for Windows Payroll 609

If you are in living in the state of Michigan and you need more information about this form, please contact your accountant or the state government. MS Exemptions Claimed: This field is applicable to Mississippi taxpayers only and is used for calculating the state withholding tax. Enter the amount from line 6 of Mississippi state form 89-350 (formerly 62-420). Since this field is a state specific field, please refer to the Readme file from the Help menu for any updated information. If you are in living in the state of Mississippi and you need more information about this form, please contact your accountant or the state government. City Tax %: If the employee is subject to a city tax that is a percent of the gross earnings, enter that percentage here. For example, suppose an employee must pay 0.5% of his gross earnings as city tax. You would enter 0.5 as the city tax percent. Important Note: In order for this percentage to be used to calculate the city tax, you must leave the City Base Rate field blank, and enter the City Limit. City Base Rate: If the employee is subject to a city tax that is a fixed amount, enter the annualized amount here. Say you have a weekly employee who needs to have $2.00 deducted from the weekly paycheck as city tax. You will enter $104.00 ($2 x 52 Weeks in a year) in this field. Important Note: In order for this amount to be used to calculate the city tax, you must leave the City Tax % field blank. City Limit: Enter the maximum amount of city tax that is to be withheld from the employee in a year. If there is no maximum limit enter 999,999.99 in this field. 610 Payroll Accounting for Windows

Important Note: Do not leave this field blank if you are using the City Tax% field. Child Support: If the employee pays child support, enter the amount to withhold from each paycheck. Excess FWT: (Excess Federal Withholding) Enter the amount of Federal income tax the employee wants to have withheld from each paycheck in excess of what is required by the government. Excess SWT: (Excess State Withholding) Enter the amount of State income tax the employee wants to have withheld from each paycheck in excess of what is required by the government. Excess LWT: (Excess Local Withholding) Enter the amount of Local (city) income tax the employee wants to withhold from each paycheck in excess of what is required by the government. Workers Comp ID: Enter the default Workers Comp ID for this employee. When you enter Time Card entries for this employee, you can override this default and assign a different Workers Comp ID to the employee s earnings. For more information on this topic, please refer to page 592. Employee Is Exempt From The Following Employer Taxes: For each of the following categories, indicate whether or not the employer is exempted from the specified type of withholding. Mark on the checkbox to indicate that the tax should not be withheld from the employer in a given category. FUTA: Exempt from Federal unemployment tax. SUI: Exempt from State unemployment tax. SDI: Exempt from State disability tax. CA Training Tax: Exempt from the state of California Training Tax. Employee Is Exempt From The Following Employee Taxes: For each of the following categories, indicate whether or not the employee is exempted from the specified type of withholding. Mark Accounting for Windows Payroll 611

on the checkbox to indicate that the tax should not be withheld from the employer in a given category. Social Security Tax/Medicare: Social Security withholding (both FICA and Medicare) FWT: Federal income tax SWT: State income tax SDI: State disability tax SUI: State unemployment tax Deductions The payroll deduction screen is discussed in the following section: Set up 8 deductions in addition to standard payroll taxes. There are eight user definable deductions available for each employee. You can customize the following information for each deduction: Deduction Name: As default, the deductions are named Deduct#1-8. You can change these generic names to suit your requirements. Tax Deferred Deduction: Each deduction can work as a regular deduction or as a Tax deferred deduction. Deduction Amounts as Dollar or Percent: Under each employee you can mark a deduction as a Dollar amount or a Percentage of the Gross. 612 Payroll Accounting for Windows

For detailed information on how deductions work, please refer to page 594. Accruals The payroll accrual screen is discussed in the following section: Track vacation, holiday, and personal accrual pay and print on checks. Automatically Accrue Personal: Check this box if you wish to have the payroll program automatically update the hours earned field for Personal benefits. Automatically Accrue Vacation: Check this box if you wish to have the payroll program automatically update the hours earned field for Vacation benefits. Automatically Accrue Sick: Check this box if you wish to have the payroll program automatically update the hours earned field for Sick benefits. When you click on the options above, when you post your payroll the next time, the program will automatically update the hours earned for Personal, Vacation, and Sick benefits. Accounting for Windows Payroll 613

Include Regular for Wages for Accruals: If you wish to have the regular hours to be used to calculate the benefits earned for Accruals mark this option with a check. Include Overtime Wages for Accruals: If you wish to have the overtime hours to be used to calculate the benefits earned for Accruals mark this option with a check. Accrual Calculations There are three fields for each accrual benefit: Hours Earned Hours Taken Balance The Hours Earned field is updated when you select the option Post Payroll. The hours earned are calculated based on the defaults set in the Payroll Setup option in the payroll Setup menu. This field is editable. The Hours Taken is based on the hours earned by the employee from the payroll checks. This field cannot be edited. The date range for which the hours taken are calculated are based on the information entered in the field below: Personal/Vacation/Sick is calculated [01] [January] to [31] [December] In the example above, the hours taken will be calculated from Jan 01 to December 31. The Balance field is calculated by subtracting the Hours Taken from the Hours Earned field. This field cannot be edited. Calculation Method: There are two calculation methods for each employee: Hours Earned Per Hour Of Regular and Overtime wages: When you select this method, then for each hour of regular (or overtime if selected) wages, the program will accrue the hours specified in the Personal, Vacation or Sick fields. 614 Payroll Accounting for Windows

Hours earned per payroll check: When you select this method, then for each payroll check, the program will accrue the hours specified in the Personal, Vacation or Sick fields. To understand how the program calculates the accrual figures, please refer to page 597. W-2 Info This tab allows you to control information printed on the W-2 for each employee. Any changes made here will be specific to that employee only. Other W-2 settings affect all the employees. For more information on the global settings, please refer to page 600. For each employee, you can enter directly the information for the boxes specified below. When you print the W-2 forms, the information entered over here will be printed on the W-2 form. If you are not sure about the information that goes in each of these boxes, we recommended that you contact your accountant or the IRS. These W-2 boxes are: Box 8 - Allocated Tips Box 10 - Dependent Care Benefits Box 12 - Benefits included in Box 1 Box 14 - Other Accounting for Windows Payroll 615

Box 15 W-2 Category: If you wish to place a checkmark on Box 15 on the W-2, select the box name from the list. Leave this option blank if you do not wish to mark in box 15. If you are not sure, we recommended that you contact your accountant or the IRS for confirmation. The options available are: Statutory Employee Deceased Pension Plan Legal Rep. Deferred Compensation Box 19 Locality Name: Enter a 4-character locality for the employee. This information is printed on your W-2 in the box 19 called Name of Locality. Locality refers to the name of the local area, the local tax that is being charged. This is usually the name of the city or county for which the local tax was withheld. A Special Note on Box 14: With the exception of New Jersey State, the information on Box 14 for the other states is printed as follows: First the sum of all deductions that have been grouped under Other Plans (Print on W2) will be printed followed by the information provided in the Employee Maintenance. Important Note: If you have a deduction that prints in box 14, and you have entered information in all the four rows of Box 14, the program will give first precedence to the deduction. In such a case, the information entered in Row 4 in the employee maintenance is omitted (as only four rows can be printed on the form). Special Note for New Jersey State and Box 14: In the case of New Jersey State, the information on Box 14 is printed as follows: First precedence will be given to the Workforce Development Tax and the Health Care Subsidy Tax followed by the Disability Insurance. This will be followed by the sum of all deductions that have been grouped under "Other Plans (Print on W2)" followed by the information provided in the Employee Maintenance. 616 Payroll Accounting for Windows

Important Note: Depending upon the availability of space, all the information provided by you may not necessarily be printed. For Example: If you have WD/HC Tax and DI and deductions, and you have data entered for the four rows of Box 14, the program will drop the data for Row 2, Row 3 and Row 4 and will only print the WD/HC Tax, DI Tax, Deductions and the information entered in Row 1. Other The screen for the tab labeled Other is discussed below. Track employee/ personnel details Drivers License #: Enter the employee s driver license number. Date Of Birth: Enter the employee s date of birth. Date Of Hire: Enter the date on which the employee was hired. Date of Last Review: Enter the date on which the employee last received a work review. Date of Last Raise: Enter the date on which the employee last received a pay raise. Accounting for Windows Payroll 617

Date of Termination: Enter the employee s termination date. This date is for your information only. If you want the program to skip this employee during the payroll generation process, you should change the employee s status to Inactive. This is done on the Personal tab in the Employee Maintenance option. C.S. Recipient: Enter the name of the recipient for the Child Support payments. This name is used on the Child Support Report. Employee Status: Select the status of the employee. The options available are Full-Time, Part-Time, or Temporary. This information is for your reference only and does the effect the calculation of the payroll taxes. Notes/Comments: You can enter unlimited notes for the employee. Click on the icon if you want to go directly to the Personnel Management screen, where you can add more detailed information. Checks This Tab lists all the checks issued to the employee. Click here to VOID the highlighted check. 618 Payroll Accounting for Windows

The following options are available on this screen: You can double click on any check to view the check details. You can single click on any header to sort the information by that column. For example, if you wanted to sort the checks by the Check Date field, then you can click on the words Check Date in the column heading. As the default, the checks are sorted by the check number. If you want to Void a check, single click on the check number you wish to void and then click on the Void button. When you Void a check, the program will do the following: Posted QTD Create a negative check to offset the currently selected check in payroll history. Create a negative check in the Bank Manager checkbook. In addition, the negative check and the original check in bank manager are both marked as Void. If you are using the accrual tracking function, the accrued hours are reduced by the amount of the voided check. The G/L Journal Entries for this payroll check are reversed. This tab lists information from the posted history file. A drop-down box lists the 12 months of the calendar year. From this list you can select the month to view the monthly summary for the employee. The summary that displays is for posted paychecks only. In addition, the Quarter 1 through 4 and the Year-to-Date totals are displayed. Accounting for Windows Payroll 619

Personnel Maintenance Using this option, you can enter personnel information for employees. This option allows you to enter more detailed information about an employee than you can in the Employee Maintenance screen. By clicking on the button, you can shift back and forth between the Personnel Maintenance screen and the Employee Maintenance screen. 620 Payroll Accounting for Windows

This screen gives you the option to add information such as Child Support, Salary History, Medical/Dental, Insurance/Union, Job Info (such as job description, comments, and commendations), Education/Skills, and Other (such as bond information, reprimands, and termination cause). You can print out the Information that you enter here using the Personnel Management Report option available in the Reports option. Change Employee ID This option allows you to change an Employee ID and have the change cascade to all the associated files, wherever the ID is used. You can access this option from the Setup submenu. Important Note: This change is final and cannot be undone. We recommend that you reindex and backup the data before you proceed. These features are available under File > Data Utilities > Backup Data Files and/or Reindex Data Files. Before you begin any of these procedures Backup, Reindex, or Change ID you must ensure that no other workstation is running the application over the network or that no other copy of the application is running on the local machine. Accounting for Windows Payroll 621

Processing Payroll Checks You can process your payroll checks by two methods: Auto Process Payroll Checks Manually Process Payroll Checks Auto Process will print checks faster than the Manual process. The reason is that the Auto process will walk you through each employee, quickly ask for hours worked, recalculate taxes, and then print the checks. Manual process is a multi step process. You will enter the timecard information, generate the payroll, view each employee to make any corrections and then print the payroll checks. In most cases, you will use the Auto Process option. Manual process will be used in the following situations: 1. When you wish to issue a check to an individual employee or a small set of employees only. 2. When you issue a complex payroll where employees' earnings are split among multiple departments, job or workers comp ID s. Here is an example: Earnings Hours Rate Dept Job Wrk Comp ID Regular 10.00 8.00 Sales Site1 9238 Regular 20.00 8.00 Cust Site2 9238 Regular 10.00 8.00 Sales Site3 9238 In the example above, the Regular Wages for the employee was split amongst multiple Departments, Job, and Workers Comp ID s in a single Pay period. In such a situation the Enter/Edit Timecard option, which is a part of the Manually Process Payroll Checks, is used to enter the hours worked. If you had to split the regular wages to a single Department, Job or Workers Comp ID then you could have used the Auto Process payroll option. In addition if you did not have any Departments, Job or Workers Comp ID s, the Auto process payroll would be the recommend option. 622 Payroll Accounting for Windows

Auto Process Payroll Checks Auto Payroll is a two-part process. In the first part of the process you are presented with a screen that prompts you for the following information: Pay Frequency Pay Type Starting payroll period date Ending payroll period date The order in which the paychecks should be generated Once you click on the OK-F4 button, the program will process employees. You will be presented with a screen where you can enter the hours worked by the employee. In addition, you can type the Department ID, Job ID, or the Workers Comp ID. The following items are supported on this screen: Input the Earnings, Department ID, Job ID or the Workers Comp ID and Deductions Calculate taxes Override the taxes for both the employee and employer Print the Payroll Worksheet Edit any incorrect payroll checks Print the Payroll checks Accounting for Windows Payroll 623

Screen Details This screen processes one employee at a time. The following fields and function keys are available on this screen. Earnings: The earnings for the employee is handled in one of the following two ways: If you are creating a new check for an employee, the default Earnings (Hours and Rates) will be obtained from the Employee Maintenance option. If there is an unposted check for the employee, the program will display the earnings of the previously processed payroll. Important Note on Tips: In addition to the earnings, you can specify Tips that the employee has already collected from the customers. The program will consider these tips when calculating the taxes. Tips will however not be added to the net amount of the check. The program assumes that cash tips have already been paid to the employee. If you are paying the tips directly to the employee, then you must change the name of one of the Miscellaneous Earnings to Tips and then enter the amount as a line item on the timecard. 624 Payroll Accounting for Windows